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Defect of Community of interest

The mechanism of community of interest has been criticized because of the following defect

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Benefits of Community of interest

A community of interest form of combination leads to the following benefits

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Community of intrests

Ownes is of the pinion that community of interest denotes ``a harmonious relationship established in two or more companies as a result of the ownership of there stock by the same person.``

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Distinction Between Trust And Holding Company

Both trust and holding company appear to be quite because they are formed through the partial consolidation of the combining units.

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Drawbacks of Holding company

A holding company suffers from the following drawbacks

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Advantages of Holding company

Holding company has become very popular because of the following advantages

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Forms of Holding company

Holding companies may take the following forms

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Holding company

A holding company is company which controls the majority composition of the Board Directors of another company or which holds more than half of its equity share capital in terms of its face value. The other company is known as the subsidiary of the holding company.

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Difference Between Trust And Cartel

Lots of different between trust and cartel

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Disadvantages of Trusts

The Disadvantages of Trusts the following functions:

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Advantages of Trusts

Advantages of Trusts

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Trust of Partial Consolidation

Trust combination gained momentum in the U.S.A. During 1890s because of the weaknesses of pooling agreements. ``A combination trust is a form of business organisation established through temporary consolidation in which the shareholders of a number of companies, under a trust agreement, transfer a controlling amount of their stock to a Board of Trustees in exchange for trust certificates. These trust certificates show their equitable interest in the income of the trust``

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Partial Consolidation

Under partial consolidation, various firms come together under formal, common ownership and management, while retaining their separate entity.

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Cartel of Federation

A cartel (or Kartell, German spelling) is a pool having common sales organisation. Cartels have usually been organized in periods of depression, when the volume of business is quite low and there is intense struggle for order.

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Limitations Of Pool

Limitations Of Pool

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Advantages Of Pools

The Advantages of Pools the following function:

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Pool of Federation

L.H. Haney has defined pool as `` a form of business organisation established through a federation of business units whose member seek a degree of control over prices by combining some factors in the price making process in common aggregate and apportioning that aggregate among members' '.

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Federation

L.H. Haney has defined federation as ``alliance for mutual support, or a union by agreement of independent and autonomous firms for mutual benefit in relations external to any member, and it implies that outside of such external relations, the members retain their independence and autonomy. Thus, a federation, both in political and business life, is a relatively loose form of combination based upon natural consent.``

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Informal Agreement

An informal agreement is a tacit understandings among competing businessmen whereby they agree to follow certain trade practices. Informal understandings are very often rigid among the competing businessmen concerning trade conditions such as price fixation, regulation of output, division of the market and other business practices which are common to all.

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Difference Between Trade Association And Chamber Of Commerce

Both trade association and chamber of commerce have many things in common. Their aim is to help the members an they do not run any business of their own. They are non-profit making organizations. Both are financed from the funds collected by entrance fees and annual subscription collected form their members.

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